Consultations between HMRC and the National Audit Office (NAO) have resulted in a statement that R&D tax relief claims will be coming under increased scrutiny. This follows a 3.4% increase on research and development activities in 2019, with the business sector making up 67% of the £38.5bn expenditure (announced by the Office of National Statistics earlier this year). Together with further commitment from the Government’s department for Business, Energy & Industrial Strategy (BEIS) with an allocation of £14.9bn in funding for innovation, research and development in 2021/2022, this has resulted in a rise of claims for tax relief by apparent ‘tax advisors’ mis-representing clients.
The changes announced by HMRC and NAO will significantly impact on the entire claim process for R&D tax credits including preparation of paperwork. Furthermore, following recognition by the Professional Conduct in Relation to Taxation (PCRT) of R&D tax credits as a specialist service, they have released guidance with confirmation that an increased focus will be placed on the R&D tax credit advisor that is making the claim on behalf of a company.
It has been suggested that HMRC will most likely make enquiries and potentially investigate where the following circumstances are part of an R&D tax relief claim:

• Newly incorporated companies.
• Those with little or no employment in the UK.
• Large disparities in year-on-year size of claim.
• Retrospective claims.
• Business sectors where R&D is seen as being unlikely.
• Companies changing their accountants or tax advisors regularly.

Furthermore, unscrupulous R&D tax relief claims companies presenting themselves as tax advisors will most likely encourage you to make a claim where there is little or sometimes no evidence at all of qualifying expenditure, or, they may significantly overclaim costs where there may be small evidence of qualifying activity. There have been reports of such advisors and companies asking client businesses to sign a “64-8” form, thereby bypassing your accountants and risking large penalties for your business.
Bearing all of the above in mind, you must therefore ensure that the Research and Development Tax Claims company that you appoint are qualified tax advisors.
You can rest assured that RnD Tax Refunds Limited is under the ownership and safe hands of MatPlus Chartered Accountants, headed up by Arif Punjani, Senior Partner and co-founder of the firm, and Tabassum Nathani, co-partner. Our team will work together in order to complete your claim and we will ensure that all paperwork and communications with HMRC are completed professionally and correctly.
Please get in touch with a member of our team on 07557 650 010 or you can email claim@rndtaxrefunds.co.uk if you think your business might qualify for an R&D Tax Refund from HMRC.